The treasurer has an important role to play in relation to the management of the audit process as well as the performance of the auditor.
Most audits are not cheap and in some cases they can be very expensive but, as with any contract, you as the treasurer need to manage the audit to ensure you are not only getting value for money but the performance of the auditor is up to standard.
How can you do that?
- Prior to the commencement of any audit the auditor should provide an audit engagement letter which details what the auditor will do. This should reflect your expectations and objectives and if you have specific areas you want to focus on then ensure those details are included.
- Be clear about who will be doing the work. For example, will junior staff be used to do most of the audit work with only the partner of the audit firm doing a final review and sign off at the end of the audit. This is nothing necessarily wrong with this for standard and routine issues but if you have specifically requested a more detailed examination of certain areas then it may be more appropriate for more senior audit staff to be used. Discuss and clarify this with the auditor.
- The auditor should provide an audit requirements schedule well in advance of the commencement of the audit. This schedule should specifically detail what information you will need to provide to assist with the completion of the audit. Ideally you should be able to prepare and provide an audit file that is for the auditor that contains all the relevant information they have requested. The main benefit of doing this is that it not only saves time during the audit, minimises distractions of the staff as well as the cost.
- as part of this schedule the auditors should be able to indicate what staff they will need to access or meet with to complete the audit. The importance for this is a poorly planned audit can significantly disrupt the operations of any organisation and especially if at a busy time or if an event is taking place.
- At the end of the audit the auditors should meet with the committee of management and discuss the audit as well as provide a management letter that provides a review of the audit.
- Any issues that have been raised that require further action should be monitored by the treasurer and the committee of management to ensure they are implemented during the year.
These points provide a basis on which you can review the performance of the auditor and how well they have undertaken and completed the audit.
Depending on your organisation there may be other points you should think about, but the ones listed above are intended to provide a guide that should help to get the best out of the audit process as well as the auditor.
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